September 5, 2007: Just months after the first iPhone went on sale, Apple ditches its bottom-tier 4GB model and cuts the price of the 8GB version by $200.
A rare misstep (considering Apple’s usual mastery of the press), this tone-deaf PR move backfires immediately. Early adopters rage about shelling out premium prices for their first-generation iPhones. Fortunately, Apple makes good.
iPhone price cut angers early adopters
Apple’s decision to eliminate the lower-tier iPhone, and cut the price for the 8GB version to $399 from $599, seemed great to casual fans. (Apple slashed the price on remaining stock of the 4GB model to just $299 as well.) Suddenly, a smartphone that many people criticized as unfeasibly expensive became far more affordable.
The problem came from Apple’s early adopters. These Apple fans, many of whom supported the underdog company during its climb back to the top, now felt cheated. In the days after the iPhone price cut, Apple websites brimmed with fanboys and fangirls calling the move Cupertino’s biggest PR disaster in years.
Another group raised alarms as well: analysts. They thought the move showed Apple was struggling to achieve volume sales. This latter point was, thankfully, countered five days later when Apple announced that it had sold its 1 millionth iPhone.
Apple makes nice with original iPhone buyers
Nonetheless, Apple sprang into action to make good with irritated customers. CEO Steve Jobs reported receiving “hundreds” of angry emails on the subject. To deal with the backlash, he decided Apple would offer a $100 credit to anyone who paid the original full price for an iPhone. That still left customers $100 out of pocket, but the swift response earned Apple loads of goodwill.
In the “this is why we can’t have nice things” category, the backlash Apple faced might explain why the company seems wary of offering discounts in the years since.
Did you shell out the full price for an early iPhone? Which model did you buy? Leave your comments below.